Over half of mobile contracts in the UK will be SIM-only by 2021, according to new research.

CCS Insight has forecast that 34 percent of consumers will be on SIM-only deals by the end of this year, up from 27 percent at the start of 2017.

This trend will increase, reaching 54 percent by 2021, the analyst house said.

Multiplay bundles of telecom services, family plans for mobile subscriptions, growth of second-hand device sales and a “largely lacklustre” smartphone market will drive growth, it added.

The UK SIM-only market remains behind the likes of France and Spain as consumers remain wedded to subsidised handset deals.

Orange revealed that SIM-only deals accounted for 99 percent of consumer voice contracts in Q4 2016, CCS noted, while in Spain consumers have “almost fully transitioned” to such contracts.

The analyst firm said the likes of Sky and TalkTalk in particular had the opportunity to drive growth in the UK.

TalkTalk is already offering free SIM cards as part of a wider strategy to attract and retain broadband and TV customers, it noted.

[Read more: TalkTalk TV chief targets rivals as revamped strategy nears completion]

Sky estimates that there are 23 million active monthly mobile subscriptions in homes using its services, meanwhile.

The company launched its mobile service in January this year.

The move to SIM-only will have implications for handset manufacturers too, CCS said.

The likes of Apple and Samsung will look to ramp up their own “direct-to-consumer” upgrade programmes, according to the analyst firm.

Read more: Smartphone sales grew 6.6% last year, Western Europe nears saturation point

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